Toys, Board Games, Dice Included in Proposed Tariffs In the up and coming trade ...

This comment was posted to reddit on May 14, 2019 at 9:52 pm and was deleted within 15 hour(s) and 48 minutes.

Toys, Board Games, Dice Included in Proposed Tariffs In the up and coming trade war between China and US

Disclosure on this account: I was a Redditor with 8k karma in the past but had deleted that account after toxic interactions with mods. I've mostly been lurking the past couple of years.

I'm a GM at a retail store, and I have an issue with your breakdown because it ignores the tiered system of distribution within the industry.

If we agree that the average increase per unit to the publisher is $2, we have to look at how that will be carried through the system. Could the publisher eat the difference and make 25% less profit? Sure. Is it likely? No.

So they'll turn around and sell that game to their distributors at an increased cost. If the unit was originally $8, but now it's $10 factoring in the tariff, distribution will then pass that cost on to the retailers. So, assuming a standard markup (which isn't necessarily 100% accurate in all circumstances because of distributor's policies on people who buy bulk, etc), that game which they originally sold to retailers at $16, is now $20 per unit.

So now it comes to me, as an FLGS manager. I have to make a decision, do I eat the cost? More importantly, can I eat the cost? For many of us, that will be an exceptionally difficult answer. If we can't, then we're turning around and selling that game to the customer at $40 in order to maintain our margins. Without the tariff and the compounding profits that each person in the chain needs to make in order to survive as a business, the game would've originally been $32.

The cost passed on to consumers is greater than you think it is, but you deal directly with customs and not the supply chain so I can understand how you wouldn't necessarily know how that situation will play out.

The end result here is going to be damaging to smaller retailers. Retailers with multiple locations will have more buying power and so will have less issues getting good prices from the distributors. Online retailers already have extremely low overhead, so they'll have a stronger ability to shelter the customer from increased prices if they so choose.

Smaller retailers already operate on thin margins, and will potentially suffer as a result.

My personal feels are that board game retailers are likely to move towards business models that focus on community, events, and amenities as a result of online sales eating into retail-side profits in the next few years anyways. This will likely accelerate that for the stores who have the ability and desire to change, and shorten the lifespan of the stores who don't.

American consumers and workers will lose in this situation. Prices will go up noticeably and there is an increased chance of FLGS's going out of business.